Advent, Cadence and more

Positive surprises

By

BarbaraC. Costanza

After the market closed Tuesday, Advent Software
ADVS
reported third-quarter earnings of $4.9 million, or 14 cents a share, compared with the year-ago total of $7.1 million, or 21 cents a share. Analysts polled by First Call anticipated a profit of 13 cents a share. Sales totaled $39.2 million, up from the year-ago total of $34.1 million. Shares closed down $1.60 to $42.87 ahead of the news.

After the market closed, Cadence Design Systems
CDN
reported third-quarter net income of $127 million, or 50 cents a share. Excluding one-time items, the company posted earnings of 22 cents a share, beating the consensus estimate by 2 cents a share. Revenue totaled $360 million, compared with the year-ago total of $332 million. The electronic design automation products and services company added that it expects fourth-quarter revenue to grow about 5 percent and anticipates service revenue to drop about 5 percent from the third quarter total of $58 million. In 2002, the company expects total revenue growth in the mid-teens, with services growth in the mid-to-high single digits. Shares closed down 77 cents to $18.60 ahead of the report.

Mercury Interactive
MERQ
reported a third-quarter loss of 9 cents a share, including amortization of goodwill and other intangible assets totaling $12.5 million and unearned stock-based compensation of nearly $1 million. Excluding the various charges, Mercury reported earnings of 11 cents a share, a penny ahead of the consensus estimate recorded by First Call, but down from 18 cents a year earlier. Revenue came in at $84 million compared to $79.5 million a year ago. Shares of Mercury Interactive closed down 21 cents to $27.46 ahead of the report.

Integrated-circuit maker Pixelworks
PXLW, -1.21%
said Tuesday that it lost $3.03 million, or 7 cents a share, in the third quarter on record revenue of $24.1 million. A year ago it had $1.8 million in profit, or 5 cents a share, on revenue of $15.3 million. Excluding special charges, it reported a pro-forma income of $3.9 million, or 9 cents a share, a penny ahead of the analyst consensus and up from $2.4 million, or 6 cents. The company projects $24 million in fourth-quarter revenue. Shares closed up 40 cents at $14.13 ahead of the report.

Duke Energy reported a better-than-expected third-quarter profit Tuesday on a 7 percent jump in operating revenue, citing expansion of its North American wholesale natural gas and power sales. Late Tuesday, the natural-gas and power marketer
DUK, +1.16%
posted a profit of $796 million, or $1.01 per share, well above the average 76-cent average estimate of analysts polled by Thomson Financial/First Call. A year ago, the company reported earnings of $770 million, or $1.03 per share. Excluding a 34-cent gain on the sale of DukeNet Communications' interest in the BellSouth PCS business, the profit per share for Q3 2000 was 69 cents. Operating revenue for Duke Energy's latest quarter reached $16.7 billion, up from $15.7 billion a year earlier. Ahead of the news Tuesday, Duke shares closed at $39.61, up $1.29.

RF Micro Devices
RFMD
reported second-quarter earnings of $1.5 million, compared with the year-ago total of $17.7 million, or 10 cents a share. Analysts polled by First Call anticipated the company to break even. Revenue for the quarter totaled $98.3 million, beating the consensus estimate of $91.7 million. In the year-ago period, the company posted revenue of $102.2 million. Revenue was above the company's previous guidance for the quarter, due to increased turns business. Revenue for the third quarter is expected to be between $99 million and $103 million. Earnings will be between a penny and 2 cents a share, excluding items. Analysts currently expect revenue of $96 million and earnings 2 cents a share for the third quarter. Shares closed up 89 cents to $24.42 ahead of the news. See full story.

I2 Technologies reported its third-quarter report after the market closed Tuesday. The software company
ITWO
reported a third-quarter pro forma loss of $55 million, or 13 cents a share, in line with the consensus estimate reported by First Call. In the year-ago period, the company posted a pro forma profit of 7 cents a share. See full story.

Digital Lightwave
DIGL
a provider of optical networking products and technology, reported a third-quarter loss of $4.1 million, or 13 a share. That compares with net income of $8 million, or 25 cents per share, for the year-earlier comparable quarter. On a pro-forma basis, the company reported a third-quarter loss of $3 million, or 10 cents per share. That compared with net income of $5 million, or 15 cents per share, in the comparable quarter a year before. Analysts, on average, were expecting a loss of 10 cents per share. Revenue slid to $8.4 million from $26.1 million for the third quarter of 2000. The company's cost-cutting plans, announced Oct. 10, are expected to reduce operating expenses by approximately $5 million to $6 million annually. Digital Lightwave will take a one-time restructuring charge of up to $500,000 in the fourth quarter. Digital Lightwave also said its CFO Steven H. Grant resigned, effective Oct. 26, "to pursue other interests."

Millennium Pharmaceuticals said Tuesday its net loss narrowed as revenue rose. The biotech firm said its third-quarter net loss was $25.2 million, or 11 cents per share, compared with $95.7 million, or 49 cents per share, in the year-ago quarter. Cambridge, Mass.-based Millennium had been expected to post a loss of 15 cents per share, according to the average estimate of analysts polled by Thomson Financial/First Call. Millennium said revenue rose to $82.2 million from $43.9 million in last year's third quarter. Ahead of the announcement, shares of Millennium
MLNM
gained 26 cents to $23.

After the closing bell Tuesday, RealNetworks reported a sharp decline in revenues for the third quarter, to $45.2 from $67.1 million in the year ago-period. While the company reported pro forma earnings of 1 cent per share, slightly above Wall Street estimates, including charges, its net loss was 12 cents per share -- an improvement over the 20 cents per share it lost in the third quarter of 2000. RealNetworks'
RNWK, -1.69%
chief executive officer Rob Glaser said in the report that "although there is economic uncertainty, we expect to see revenue in the fourth quarter similar to that reported in the third quarter [and] we expect breakeven to slightly positive pro forma operating earnings before interest and taxes in the fourth quarter." Shares in the Seattle-based media software firm closed up 19 cents, or 3.3 percent, to $6. See full story.

Rambus, a memory chip technology company, reported smaller profits for the fourth quarter as the slowing economy took a bite. The company's
RMBS, +0.67%
net income was $6.5 million, or 6 cents a share for the quarter, compared with last year's net income of $53.6 million, or 49 cents, but which includes a $38 million tax benefit. Excluding one-time items, the Los Altos, Calif.-based company reported a pro forma profit of $6.6 million, or 6 cents a share. That's down from $10.2 million, or 9 cents, in 2000. Analysts had expected Rambus to make 4 cents a share in the fourth quarter, according to Thomson Financial/First Call. Rambus was down by 2 cents to $11.70 after hours; shares were up about 1 percent to $11.72 during the regular session. See full story.

Veritas Software
VRTS, +0.60%
which makes software for data management and storage, reported a third-quarter profit Tuesday lower than the year-ago period as the events of Sept. 11 impacted results. Veritas out of Mountain View, Calif. said it earned $51 million, or 12 cents a share, vs. $70 million, or 16 cents a share, in the year-ago period. Analysts were expecting Veritas to earn an average of 11 cents a share in the most recent quarter, according to Thomson Financial/First Call. The estimates ranged from 7 to 14 cents. Revenue rose in the quarter $340 million from $317 million a year ago. Analysts were expecting $339.4 million. Shares closed up $1.50 to $29.43 ahead of the announcement. See full story.

MKS Instruments
MKSI, +0.49%
reported a third-quarter loss of $9 million, or 24 cents a share, on revenue of $53.2 million. During the same quarter last year, net income was $15.7 million, or 42 cents a share, on revenue of $128.9 million. Excluding charges, the loss was $5.7 million, or 15 cents a share. Analysts expected a loss of 16 cents a share, on average. Sales during the fourth quarter are expected to decline to $41 million to $45 million. Ahead of the report, MKS shares closed down 32 cents, or 1.6 percent, to $19.70.

IBM's net earnings dropped 19 percent compared with the same period a year ago, and the company's sales fell short of Wall Street expectations, although the company
IBM, -0.41%
beat earnings targets. Big Blue's earnings were 90 cents a share, down from $1.08 in the year-ago period. The company was expected to earn 89 cents a share, on average, according to research firm Thomson Financial/First Call. Analyst estimates ranged from 82 cents to 95 cents a share. IBM's third-quarter 2001 revenues totaled $20.4 billion, down 6 percent from the year-ago quarter. Big Blue had been expected to report revenue of $20.8 billion. IBM shares lost 15 cents to close at $101.85 on the New York Stock Exchange. See full story.

Pharmaceutical manufacturer Forest Laboratories
FRX, -1.59%
reported second-quarter earnings of $80 million, or 43 cents a share, compared with the year-ago total of $52 million, or 28 cents a share. Analysts polled by First Call expected a profit of about 41 cents a share. Sales for the quarter totaled $376 million, up 34 percent to $281 million. The stock closed down $5.61 to $74.67.

Schwab
SC.H, -12.50%
said it earned $13 million, or a penny a share, in its third quarter, down from $142 million, or 10 cents per share, in the year-ago period. Income from operations totaled $81 million, or 6 cents per share, down from $165 million, or 12 cents per share last year. The latest figure beat the forecast for earnings of 5 cents per share in a survey of analysts by Thomson Financial/First Call. Revenue was $1 billion, down from $1.3 billion last year. Shares of the discount brokerage closed up 10 percent to $12.10.

Maytag
MYG
posted a third-quarter loss of $29.7 million, or 39 cents per share, vs. net income of $59.5 million, or 77 cents per share last year. Net income excluding special charges, was $35 million, or 45 cents per diluted share. That figure beat the forecast for earnings of 40 cents per share in a survey of analyst by Thomson Financial/First Call. Shares of Maytag rose 55 cents to $28.62 on Monday. Maytag's consolidated sales in the third quarter, which included two months of the recently acquired Amana, were $1.23 billion, up 16 percent from $1.1 billion last year. The appliance manufacturer said it expects to meet its fourth quarter target of 42 cents per share "if the industry and our orders hold at present levels for the balance of the year." Shares closed up 76 cents to $29.38.

Johnson & Johnson
JNJ, -0.97%
said its third-quarter profit rose 16 percent to $1.5 billion, or 49 cents per share, from $1.3 billion, or 43 cents per share, in the year-ago period. Excluding certain charges, J&J said earnings per share for the third quarter were 50 cents per share, an increase of 16.3 percent as compared to the same period in 2000. The New Brunswick, N.J.-based health-care giant had been expected to earn 48 cents per share, according to the average estimate of analysts polled by Thomson Financial/First Call. J&J said sales rose to $8.2 billion from $7.4 billion in last year's third quarter. The stock closed up $1.05 to $56.77.

Bank One Corp.
ONE, +0.00%
announced third-quarter net income of $754 million, or 64 cents a share, compared with $581 million, or 50 cents a share, in the year-ago quarter. The results topped the Thomson Financial/First Call estimate of 62 cents a share. Total revenue, net of interest expense, stood at $4 billion vs. $3.9 billion in the year-ago quarter. The stock rose $2.46 to close at $32.81.

PanAmSat
SPOT, +0.14%
posted third-quarter net income of $19.5 million, or 13 cents a share, up from $9.3 million, or 6 cents a share in the year-ago period. The latest figure beat the forecast for earnings of 2 cents per share in a survey of analysts by Thomson Financial/First Call. The unit of GM Hughes
GMH
rang up revenue was $253 million, up from $199.3 million. The satellite communications company reaffirmed its financial outlook for the rest of the year: revenue of about $860 million to $870 million and earnings per share of 15 cents to 25 cents. Wall Street is targeting year-end earnings of 9 cents a share. Shares closed up $1.69 to $22.08.

Diamond Offshore Drilling
DO, -1.40%
reported net income for the third quarter of $53.4 million, or 38 cents a share, compared with net income for the prior year quarter of $10.5 million, or 8 cents a share. Revenue for the third quarter totaled $230.6 million compared with revenue of $157.3 million for the third quarter of 2000. Analysts had expected the Houston-based deep-water drilling company to report earnings per share of 34 cents in the quarter ended Sept. 30, according to Thomson Financial/First Call. The stock rose $1.24 to close at $26.56. See full story.

Knight Ridder
KRI, -0.76%
reported third-quarter net income of $55.7 million, or 65 cents a share, down from $76.1 million, or 87 cents a share, in the year earlier period. Analysts surveyed by Thomson Financial/First Call had been expecting earnings of 63 cents a share, on average. Revenue for the period fell 10 percent to $693 million, compared with analyst expectations of $701 million. "Third quarter operating results were held back by continuing advertising softness, exacerbated by the terrorist attack on Sept. 11," said Tony Ridder, the newspaper publisher's chairman and chief executive. Ridder added that he was inclined to reaffirm consensus expectations for earnings of $2.91 a share for the year, but cautioned that the initiation of bombing in Afghanistan caused another slowdown. The stock closed up 60 cents to $57.72.

Broadwing
BRW, -1.15%
reported mixed third quarter results, and warned that full-year revenue would fall short of expectations. Losses for the quarter were $30.5 million, or 14 cents a share, wider than the loss of $25.9 million, or 12 cents a share, recorded in the same period a year ago. Excluding non-recurring gains, per-share losses narrowed to 15 cents from 19 cents last year. Analyst surveyed by Thomson Financial/First Call had been expecting losses of 16 cents a share, on average. The telecommunications company now forecasts revenue of $2.35 billion to $2.38 billion for the year, below the $2.47 billion expected by analysts. The stock closed down 25 percent to $11.50.

Mohawk Industries
MHK, -1.15%
posted earnings of $55.7 million, or $1.05 a share, compared with the year-ago total of $46.4 million, or 87 cents a share. Analysts expected a profit of 87 cents a share. The carpet manufacturer expects fourth-quarter earnings to be in line with the year-ago total of 74 cents a share. Shares closed up $1.69 to $42.08. See full story.

St. Jude Medical
STJ, +0.83%
reported third-quarter earnings a penny better than analysts expected. Third-quarter earnings totaled $52 million, or 58 cents a share, compared with the year-ago total of $38 million, or 44 cents a share, excluding one-time items. Analysts polled by First Call anticipated a profit of 55 cents a share for the medical equipment company. Shares closed up $1.50 to $72.40. See full story.

NMS Communications
NMSS
reported a third-quarter loss of $9.6 million, or 26 cents a share, beating the consensus estimate of a 27-cent loss. In the year-ago period, the company earned a profit of $4 million, or 11 cents a share. Revenue for the quarter totaled $16 million, down 60 percent compared with the year-ago total of $40.5 million. Shares of the communications hardware and software company closed down 23 cents to $2.61. See full story.

Unisys
UIS, +0.85%
a provider of Windows-based servers and software, reported a third-quarter profit of $20.9 million, or 7 cents a share, 2 cents better than the average of analysts polled by First Call. A year ago, Unisys earned $44.2 million, or 14 cents a share. Because of economic uncertainty, Unisys said it would move to lower costs in the fourth quarter by cutting 3,000 jobs and taking other action. The company added that it expects fourth-quarter earnings between 10 cents and 15 cents a share, while analysts currently expect a profit of 21 cents a share. Shares closed down 41 cents to $8.99. See full story.

Cognex
CGNX, +0.06%
reported third-quarter net income of $2.29 million, or 5 cents a share, compared with $19.39 million, or 42 cents a share, during the same quarter last year. Analysts expected earnings of 4 cents a share, on average, according to Thomson Financial/First Call. Revenue was $33.97 million compared with $67.96 million during the same quarter last year. According to a statement, the order rate has worsened in recent weeks and revenue for the fourth quarter is now expected to fall 25 percent sequentially as the industrial equipment company posts a loss of 1 cent to 3 cents a share. Shares closed down $1.66 to $20.84.

Negative surprises

Wells Fargo
WFC, -2.69%
posted third-quarter net income of $1.16 billion, or 67 cents a share, vs. $821 million, or 47 cents a share, in the year-ago quarter. Thomson Financial/First Call had expected earnings-per-share of 69 cents for the quarter. Total revenue rose to $5.48 billion vs. $4.83 billion in the year-ago quarter. The San-Francisco-based bank said net interest income on a taxable equivalent basis was $3.22 billion in the third quarter, up 15 percent from the third quarter of 2000. Meanwhile, the provision for loan losses totaled $455 million in the third quarter compared with $425 million in the year-ago period. Net charge-offs during the quarter totaled $454 million, or 1.10 percent of average loans, vs. 330 million, or 0.88 percent, for the third quarter of 2000. The stock closed down 58 cents to $40.19.

Black Box
BBOX, -1.75%
posted second-quarter earnings of $17.1 million, or 83 cents a share, compared with $16.2 million, or 82 cents a share a year ago. Analysts were looking for a profit of about 85 cents a share. Revenue for the quarter totaled $197 million, down 6 percent compared with the year-ago total of $210 million. The Sept. 11 attacks cost the company about $3 million to $4 million of revenue and 3 cents to 4 cents of earnings per share, company officials said. Black Box said it expects revenue of about $190 million and earnings of about 85 cents to 86 cents a share for the third quarter. According to First Call, analysts had been expecting a profit of 88 cents a share for the third quarter. Shares closed up 46 cents to $49.98.

Earnings advisories

Support.com
SPRT, +0.67%
said based on the current economic environment and its effect on new software orders, the company has reassessed its outlook for the fourth quarter. The e-commerce software company now expects revenue to be in the range of $8.2 million to $8.6 million for the fourth quarter 2001, which is about 16 to 22 percent sequential revenue growth. Excluding one-time items, the company anticipates a fourth-quarter loss per share of between 10 cents and 12 cents a share. The company will also continue to reduce expenses, thereby maintaining its bottom-line results within the original target of a loss between 65 cents and 71 cents for the full year. For 2002, revenue is forecast in the range of $40 million to $44 million. The company still expects to be on track with its initial targets for cash flow and profitability in 2002. The company also posted a third-quarter loss of 18 cents a share, beating the consensus estimate of a 19 cent loss. Shares closed up 36 percent to $3.

Shares of BioReliance
BREL
closed up 28 percent to $28.11, after the company said that it expects to report third-quarter results that are "substantially higher" than previous expectations. The provider of nonclinical testing services for the biotechnology industry now expects earnings to be 24 cents to 26 cents a share, compared with its prior target of 8 cents to 12 cents. The one analyst polled by Thomson Financial/First Call had been expecting a profit of 10 cents a share. The company attributed the better-than-expected results to contributions from its testing and development businesses in the U.S. and Europe.

Citing a drop in demand after the Sept. 11 attacks, Parker Hannifin
PH, -0.20%
said it now expects second-quarter earnings between 30 cents and 42 cents per share. That's below the current consensus expectation for earnings of 52 cents per share. The aerospace and industrial company warned it sees "no immediate evidence of an upturn in sight." Earnings for the full year are expected to range from $2.20 to $2.50 per share, below the current target of $2.61 per share. The company also posted first-quarter net income of $60.6 million, or 52 cents a share, down compared with $125 million, or $1.09 a share, in the year-ago period. The latest number beat by 2 cents per share the target of 50 cents per share in a survey of analysts by First Call/Thomson Financial. Shares closed up 43 cents to $38.97.

Caterpillar
CAT, -0.03%
said that as a consequence of the Sept. 11 terrorist attacks, the slowing of economic activity has become sharper and added that recovery is expected to be back on track by mid-year 2002. The Peoria, Ill.-based heavy equipment and machinery manufacturer projects fourth-quarter 2001 sales and revenue to be "down slightly" compared with the fourth quarter of 2000 and sees its full-year profit down 10 to 15 percent. Wall Street analysts had expected earnings to be up 5.3 percent in the fourth quarter from the year-ago period. For 2002, Caterpillar expects worldwide industry sales to be flat to up slightly compared with 2001. The company also reported third-quarter net income of $205 million, or 59 cents a share, vs. $216 million, or 62 cents a share, in the third-quarter of 2000. Wall Street had expected the Dow company to earn 62 cents a share in the quarter. The stock closed down 17 cents to $48.03.

Crescent Real Estate Equities
CEI, -2.81%
warned investors that its third-quarter earnings will be between 50 cents and 52 cents a share, instead of the company's previous outlook of between 59 and 60 cents a share. For the year, the company expects earnings of between $2.25 and $2.40, instead of its previous target of between $2.60 and $2.62 a share. Analysts polled by First Call currently expect a third-quarter profit of 60 cents a share and fiscal 2001 earnings of $2.58 a share. For 2002, the company predicts earnings of between $2.15 and $2.30 a share. Analysts polled by First Call anticipated fiscal 2002 earnings to total about $2.77 a share. Shares closed down 8.5 percent to $17.20. See full story.

Looking to the fourth quarter, Delphi Automotive Systems
DPH, +50.00%
expects revenue of $6.3 billion to $6.5 billion and net income of $30 million to $85 million, or 5 cents to 15 cents a share. On average, Analysts had expected fourth-quarter earnings of 19 cents on revenue of $6.7 billion. The company also posted third-quarter net income of $26 million, or 5 cents a share, in line with analysts' estimates. The Troy, Mich.-based company dubbed the third quarter "challenging" due to continued softening of auto production. Delphi also announced that it expects to cut an additional 1,000 to 1,500 jobs this year. The stock closed down 27 cents to $12.90.

Kimberly-Clark said it expects to report lower per-share profit than last year because of currency charges. The consumer products company
KMB, -0.18%
said it will earn 80 cents a share, with a 6-cent charge because of "currency effects" in Mexico and Australia. Third-quarter sales should total more than $3.7 billion, up 5 percent from last year. Analysts polled by First Call currently expect earnings of 85 cents a share. The company will report results on Oct. 23. Shares closed down $4.48 to $55.58. See full story.

Sierra Wireless
SWIR, +0.28%
said fourth-quarter losses would total between 15 cents and 17 cents a share, while analysts polled by First Call currently expect a loss of 7 cents a share. Revenue is expected to total between $14 million and $15 million. The company also reported a third-quarter loss of 18 cents a share, on revenue of $12.9 million. The third quarter was in line with analysts' estimates. Shares closed up 85 cents to $13.50.

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